Chipotle Mexican Grill on Wednesday cut its forecast for same-store sales growth this year after traffic declined for a second straight quarter.
The burrito chain now anticipates flat same-store sales growth for 2025, down from its prior projection of a low-single-digit percentage increase. Chipotle trimmed its same-store sales outlook for the second consecutive quarter.
But the company said sales trends are turning around. Starting in June, customers have been returning to Chipotle restaurants, thanks to its summer promotions and the launch of its Adobo Ranch dip, CEO Scott Boatwright said on CNBC’s “Closing Bell: Overtime.”
Shares of the company fell 9% in extended trading.
Here’s what the company reported for its second quarter compared with what Wall Street was expecting, based on a survey of analysts by LSEG:
Earnings per share: 33 cents adjusted, in line with expectationsRevenue: $3.06 billion vs. $3.11 billion expected
Chipotle’s net sales rose 3% to $3.06 billion, thanks to its new restaurants. But the company’s same-store sales shrank 4%, steeper than last quarter’s decline of 0.4% and StreetAccount estimates of a 2.9% decrease for the second quarter. Average check increased roughly 1%, partially offsetting traffic declines of 4.9%.
Last year, Chipotle outpaced the rest of the restaurant industry, bucking a trend of sluggish sales and traffic declines. But by the end of December, the company started seeing softer sales, which executives chalked up to the timing of Christmas and New Year’s Eve. That was followed by bad weather in January, including wildfires in California, and a broader consumer pullback in February that continued into the spring.
During the company’s first-quarter earnings call, Boatwright said diners’ concerns about the economy led them to skip restaurant visits and save their money instead.
May was another tough month for Chipotle, paralleling the drop in consumer sentiment during the same period, according to Boatwright. However, by June, same-store sales began increasing again.
“Exiting the quarter, we returned to positive comp and transaction trends, which have continued into July,” Boatwright told analysts on the company’s conference call.
He later reiterated the company’s belief that it can return to same-store sales growth in the mid-single digits in the long term and achieve average unit volumes for its restaurants of $4 million.
“There’s no smoking gun here that says we’ve had a misstep, and that gives us confidence to stay on strategy, innovate where we can try to meet the consumer where they are, in our own unique Chipotle way, but more importantly, to really continue execution in the restaurant, delivering great team member experiences and great guest experiences,” Boatwright said.
Chipotle reported second-quarter net income of $436.1 million, or 32 cents per share, down from $455.7 million, or 33 cents per share, a year earlier.
Excluding impairment charges, legal costs and other items, the company earned 33 cents per share.
Chipotle reiterated its forecast that it would open between 315 and 345 new restaurants this year.
